AOL has invested $10m in CrunchFund, which will operate independently from AOL Ventures, with the other venture capitalists believed to have invested about $1m each. Patrick Gallagher, an investor at VantagePoint Venture Partners, will run CrunchFund alongside Arrington.

An AOL spokesman told the Wall Street Journal: "Mike will run the fund and will continue to write for TechCrunch, but will have no editorial oversight."

Erick Schonfeld, co-editor of TechCrunch, will take over as interim editor while AOL searches for a permanent replacement.

Arrington's departure from TechCrunch comes after a tumultuous period, since the famously punchy site was acquired by Huffington at AOL.

A household name in Silcon Valley, Arrington announced a return to investing in startups in April, causing fellow bloggers to criticise a claimed "lack of transparency" around the editor's involvement in the companies TechCrunch wrote about.

The California-born entrepreneur's departure will also raise questions about the future of TechCrunch under AOL.

Under the stewardship of Huffington, AOL aimed to take on international competitors including the New York Times and Washington Post with a roster of popular blogs, led by TechCrunch and the Huffington Post.

At the centre of AOL's ambition are the personalities behind those blogs, with Arrington and Huffington at the core. The AOL chief executive, Tim Armstrong, was open that it had paid $315m in February not just for the Huffington Post, but for its charismatic founder.

More recently, rumours of a sale or plans to go private have swirled around AOL. The content company's shares have soared 24% since Monday, to $15.19, amid speculation that the company had met bankers Allen & Company. AOL was also rumoured to be considering a sale of its dial-up internet business, which accounts for about half of the company's $1.62bn market capitalisation.